The $100 billion question - Signal Lake Venture Fund

Chart 4: Bank size and volatility
Chart 5: Bank diversification and volatility
Income
volatility
3.0%
Income
volatility
3.0%
2.5%
2.5%
R 2 = 0.013
2.0%
1.5%
R 2 = 0.0857
2.0%
1.5%
1.0%
1.0%
0.5%
0.5%
0.0%
0 1,000 2,000 3,000 4,000
Average assets ($m)
0.0%
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7
Diversification
Notes: Average assets are calculated for 24 banks between 2006 and
2008. Income volatility is measured as the standard deviation of
operating income (per asset) over the period 1997-2008.
Source: Bankscope, published accounts and Bank calculations.
Notes: Pre-crisis diversification and income volatility for a sample of
25 banks. Diversification index based on revenue concentration, as
described in the main text.
Source: Bankscope, published accounts and Bank calculations.
Chart 6: Bank size and write downs
Chart 7: Bank diversification and write
downs
Write
downs per
asset
7%
6%
Write
downs per
asset
7%
6%
5%
5%
R 2 = 0.0009
4%
R 2 = 0.0919
4%
3%
3%
2%
2%
1%
1%
- 1,000 2,000 3,000
Total Assets ($bn)
0%
0%
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7
Diversification
Notes: Total assets for a sample of 21 banks for 2007. Cumulative
write downs over the course of the crisis are shown (from 2007 Q4 to
2009 Q3).
Source: Bankscope, published accounts and Bank calculations.
Notes: Sample of 21 banks. Cumulative write downs over the
course of the crisis are shown (from 2007 Q4 to 2009 Q3).
Source: Bankscope, published accounts and Bank calculations.
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